Sometimes people get themselves into debt trouble and are unable to pay back debts. When this happens, creditors are legally authorized to take steps to receive the money they are owed. One option is to file a property lien against debtors who are in default. Understanding when a lien is justified and what to do about a lien will help you (the debtor) to get your financial situation back on track. 

What Is a Lien?

A lien is a legal mechanism, which basically allows a creditor to have a stake in your home. In some cases, this may prevent the sale of your home in that buyers will not want to buy a property that has a lien placed on it because the lien can be transferred to the new owner. In extreme cases, creditors can force foreclosure on your home in order to receive the money they are due in the sale. Thus, liens are a serious matter that can really put a person in a bind. 

When Is a Lien not Justified?

If you hire a contractor to do some work and pay the contractor all of the money that they are due, they should have no cause to file a lien against you. On the other hand, if a contractor finds out that you have decided to go with someone else for a future project, the first contractor might feel cheated and file a lien against you. In this case, if you don't owe the contractor money, you are not legally bound to pay them anything, and the lien is unjustified. 

What to Do about a Lien?

If a creditor has a legal basis for filing a lien, then you have no choice but to pay the money. If you don't have liquid money available, then you will have to deduct the amount of money tied up in the lien from any profit you make on selling your home. If a lien is unjustified, there are legal mechanisms you can employ to have the lien removed without feeling bullied into paying someone money. 

Understanding how to handle yourself when faced with a lien is not necessarily straightforward. As is the case with other branches of the law, real estate law can be complicated. Thus, you should hire a legal guide who has experience with similar cases to advise you, and if necessary present your case in court.